Business Strategy
Case Study - Bose Corporation's Competitive Advantages and Its Shift to an Online-Only Model
Article Details
| Pub. Date | : Mar' 2021 |
|---|---|
| Product Name | : The IUP Journal of Business Strategy |
| Product Type | : Article |
| Product Code | : IJBS40321 |
| Author Name | : Debapratim Purkayastha, Anil Anirudhan and Sanjib Dutta |
| Availability | : YES |
| Subject/Domain | : Strategic Journals |
| Download Format | : PDF Format |
| No. of Pages | : 17 |
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Abstract
This case is about the strategic decision of Bose Corporation (Bose) to close down its retail stores in
North America, Europe, Japan, and Australia. Its retail stores at other locations around the world were
to, however, remain open and continue operations. The case dwells upon Bose's relentless focus on
research and development, which gave it a competitive edge over its rivals. The case details the travails
of the retail industry and the onslaughts Bose faced from the e-commerce companies, which led to the
closure of several of its retail businesses and a reduction in the number of its stores. Bose's online strategy
is discussed in detail along with its use of social media and online marketing. While some analysts were
in favor of the store shutdown, others were quite critical and opined that Bose was likely to return to
its store format. The case ends with the question whether Bose's decision to shut down its stores was
right and whether customers would purchase its products online without 'experiencing' the products in
person.
Originally, our retail stores gave people a way to experience, test, and talk to us about multicomponent,
CD and DVD-based home entertainment systems. At the time, it was a radical
idea, but we focused on what our customers needed, and where they needed it - and we're
doing the same thing now. It's still difficult, because the decision impacts some of our amazing
store teams who make us proud every day.i
- Colette Burke (2020), Vice President-Global Sales,
Bose Corporation.
The brand is very different today from where it started and stores could help tell that story. I
think this is a lost opportunity where they have decided it's more cost effective to give up on
stores than to try and make them something that elevates the brand.ii
- Ricardo Belmar (2020), Senior Director-Retail Transformation,
Infovista.
Description
On January 15, 2020, Bose Corporation (Bose) a leading global manufacturer of highend
audio systems, announced that it planned to close all 119 of its retail stores in
North America, Europe, Japan, and Australia. However, its remaining 130 stores-
located in Southeast Asia, South Korea, Greater China, United Arab Emirates, and India-
would remain operational and would not be affected by this decision.iii
This strategic move by Bose was in response to the growing trend among customers to
shop online for its audio products such as speakers and headphones. Though Bose planned to
close down its stores, its customers had the choice to check out and purchase its products at
retail stores such as Target Corporation,1 Best Buy Co., Inc.,1 Apple,1 and the company's
Amazon storefront4.
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